Corporate social responsibility

Safety underpins everything we do."

Our commitment to corporate responsibility is a key element of the strategy of the Group and is central to how we run the business.

Our board takes regular account of the significance of social, environmental, ethical and health and safety matters to the Group. A comprehensive risk management and internal control process is in place.

With our focus on people, we are passionate about providing excellent training and skills development opportunities that benefit individual members of staff and preserve our high working standards. We also support employment in local areas by taking on apprentices across the Group each year, hiring our people locally wherever possible and providing opportunities for graduates across a number of functions including business support, quantity surveying, design engineering, site management and project management.

Overview of commitment to corporate social responsibility

We take our responsibilities very seriously and are committed to good practice in all our CSR activities. We work beyond compliance to consider how we can have a positive impact on communities, minimise risk in our operations and ensure the best health and safety performance standards. This commitment can be seen in our core values and mission statement which has been communicated through roadshows and toolbox talks to all our employees.

Safety, health and environment

In the current year, we introduced a number of initiatives aimed at improving the Group's accident frequency rate (AFR). These included a focus on 'near miss' reporting, both in the factory and on site and which we incentivised using monetary awards and donations to local charities. They also included improved health and safety communications, investment in technology and training and site SHE visits by directors to drive visible leadership and reaffirm our commitment to a zero accident culture.

The current year AFR of 0.21 includes an AFR of 0.33 for our UK operations which also compares favourably (c40 per cent lower) with the previous year's UK AFR of 0.57. In 2014/15 we had 12 RIDDORs compared to 22 in 2013/14, which is reflected in our improved AFR results.

We are very pleased with this improvement but are not complacent and we will continue our efforts to improve health and safety awareness across the entire Group in the coming year. We will continue to concentrate on improving our AFR performance in 2015/16 and we believe that our focus in the following five key areas will deliver the performance we desire.

Work environment

This year we have continued our focus on improving the lighting levels in the factories to make them a better place to work; this work will be ongoing in 2015/16. This has had a positive impact on efficiency, greenhouse gas emissions and on the working environment in general.

We have improved the conditions of the yards in all of our factories and have undertaken a comprehensive review of welfare facilities for Severfield (UK). We have established a new training and canteen facility at Dalton which will substantially improve the environment for training and create a more convivial atmosphere for mealtimes and breaks for all of our employees.

We issued a new personal protective equipment (PPE) brochure and policy in 2014/15 which focused on providing a better quality and standard of PPE for our employees and we aim to roll this out to our supply chain in 2015/16.

One of our safety critical areas is tool tethering and in 2014/15 we enhanced our tool tethering policy and undertook extensive trials of products available in the market to ensure that the Group was industry leading in this respect. Following this review, we entered into a new agreement with a UK-based company for all new tool tethers supplied to the Group.

During the year, we have developed and implemented our Seversafe® edge protection product, our lorry edge protection system and we now have our own bespoke fan protection systems. These systems comply with the Work at Height Regulations in terms of meeting the requirements for collective protection measures and our edge protection solution is endorsed by the Edge Protection Federation.

Commitment

The Group continues to maintain an appropriate SHE budget. We committed last year to improving SHE communication across the Group and to this end we have delivered SHE news bulletins this year and we have issued SHE posters in response to incidents and near misses.

We hold regular Group, factory and site safety leadership team (SLT) meetings and the Group meeting is attended by the CEO and COO. We use this meeting structure to derive, test and challenge our policies and to ensure we react in an appropriate manner to incidents and near misses.

For 2015/16 we are implementing a director tour matrix to include our plc directors and our chairman to demonstrate to our workforce and our clients our commitment to our safety, health and environmental performance.

We have undertaken 1,241 (2014: 1,159) man-days of training in the year. This includes more than 40 different courses; examples are: site manager safety training scheme, overhead crane supervision and use, first aid, portable magnet use, life jacket use, confined space and reversing vehicles.

Leadership

We use a variety of styles of leadership, from transformational with vision, dynamism and energy to create the culture we want to work within, through to transactional leadership to embed our culture using tools such as coaching, recognition and corrective action.

We demonstrate leadership by undertaking director tours, chairing committees, involving our senior management in incident investigations, being involved in and attending formal and informal training, and communications around safety, health, environment and sustainability with our workforce, clients and supply chain.

Engagement

We engage with our stakeholders on a daily basis. Key engagement behaviours are communication, involvement, visibility and support. We are continually striving to communicate better this year, (as discussed above), we have continued to actively involve the directors in safety, health, environment and sustainability committees and we use the audit process as a communication tool.

To improve engagement with our employees, clients and supply chain, we regularly attend client meetings and our Group SHE director liaises directly with the SHE teams within our client organisations and with the UK Contractors Group. With respect to our employees and supply chain, they are represented at our SLTs and committees and our visible leadership means that we frequently have workplace-based conversations with our employees and supply chain alike.

We have amended our site audit and inspection system. We now undertake all on a web-based format which allows much better analysis of where our key issues lie. This allows us to focus our resources in the correct areas and engage with our workforce, supply chain and clients in a targeted manner.

Behaviour

We define behaviour as everything we say and do. This means that any culture change model needs to include an element of understanding of what drives these behaviours and how we generate positive, safe behaviours in the workplace.

We have trained all the SHE team as organisational coaches to ensure that when we interact with our stakeholders, we are obtaining the best outcome for them and for the Group in terms of our safety, health and environmental performance.

During the next year we will continue with our behavioural safety programme, starting with training the SHE team in cognitive behaviours and conducting a SHE culture survey.

Sustainability

Steel is arguably the most sustainable of the major structural materials. It has numerous sustainability benefits, such as low waste, flexibility, off-site manufacture, speed, resource efficiency, adaptability, demountability, long lasting appeal, safety, reusability and recyclability. These inherent characteristics result in many social, environmental and economic benefits to satisfy sustainability's 'triple bottom line'.

Steel is a fast, safe construction material. Reduced time on-site means lower costs, quicker returns and less disruption to the local community. The Group's steel is manufactured off-site in a safe factory environment and arrives on site only when needed. Steel has a high strength to weight ratio and is resource efficient. The fact we can erect with fewer deliveries means reduced emissions.

Steel's long, clear spans mean that interiors can be changed with ease. Steel frames can readily be adapted and reconfigured to give old buildings a new lease of life. The longevity of a building is fundamental to its overall sustainability.

Steel structures are inherently reusable in full or part. An increasing number of buildings are being designed with this in mind, but reuse is an option for steel structures without any special provision. Any steel which is not reused is captured and recycled for further use in construction or elsewhere.

Steel can be recycled indefinitely without loss of property or performance. This is referred to as multicycling. It means steel always has a value, which guarantees that virtually none is ever disposed of to landfill. The multicycling of steel is a self-sustaining system that predates modern appreciation of environmental issues and would continue in the unlikely event that they should ever lessen in importance.

Sustainability committee

During the year we established a sustainability committee. The committee approved the introduction of energy management systems in our Dalton facility and changing our lighting in all factories to low energy lighting which resulted in a significant reduction in energy usage and costs.

Our 2015/16 targets and objectives for the sustainability committee include:

Carbon reduction policy and strategy

Reduction in carbon intensity by 2020/21

Waste reduction and diversion of waste from landfill

Comply with Energy Savings Opportunity Scheme (ESOS)

Quarterly GHG reporting using shared database and validation of emissions

Picture: Bridlington School visit to our Sherburn facility in June 2014.

Environmental performance

The Group maintains its environmental management system which is certified to ISO 14001. Information on our environmental impact is collated monthly and is reported to the board. This includes impacts such as waste, factory energy, VOC emissions and fuels. We met our monthly average VOC concentration limit targets for every factory in 2014/15. With respect to waste 89 per cent is recovered or recycled.

All our works and project sites operate in accordance with our sustainability policies. We track our sustainability performance on a project by project basis and, where required, report information to our clients.

Greenhouse gas emissions reporting

In accordance with the Companies Act 2006 (strategic report and directors' reports) Regulations 2013, we report our emissions as described below.

Reporting boundaries

To the best of our knowledge, we have included all material emission sources which fall within the boundaries of our consolidated financial statements.

All direct (scope 1) and indirect (scope 2) emissions are reported in absolute tonnes equivalent CO2 (CO2e). Greenhouse gases ('GHG') included are carbon dioxide, methane and nitrous oxide emissions from the combustion of fuels disclosed below, and carbon dioxide emissions from the consumption of purchased electricity.

Methodology

The Group's GHG emissions have been calculated using an operational control approach in accordance with WRI/WBCSD GHG reporting protocols (revised edition) and emission factors from UK Government GHG conversion factors for company reporting 2013.

For the year ended 31 March 2015, the Group's global GHG emissions were as follows:

Emissions from:

Tonnes of CO2e

2015

2014

Scope 1 – combustion of fuel and operation of facilities

5,529

6,340

Scope 2 – electricity, heat, steam and cooling purchased for own use

6,345

6,179

Total CO2e emissions

11,874

12,519

Intensity measurement:

2015

2014

Absolute tonnes equivalent CO2e per £m of revenue

59

54

Scope 1 and 2 emissions in 2014/15 were 5 per cent lower than in 2013/14, mainly as a result of a significant reduction in gas oil usage. Our intensity ratio per £m of revenue has increased by 9 per cent this year, however our intensity ratio per factory staff hour has decreased by 6 per cent. The reason for this differential is because over the past year we have undertaken work which involves less tonnage but more fabrication resource.

People

We are proud of our 1,200 strong workforce and recognise that the long-term success of our business depends on our ability to attract, retain and develop the best talent in the industry.

Change

In 2013/14, our people were called upon to embrace change and in particular Severfield (UK) completed its reorganisation, resulting in a strong, talented and aligned team. We continued to invest in our people in 2014/15, through the training and development of our existing employees and targeted external recruitment as necessary.

During 2014/15, we made the following key appointments:

Gary Wintersgill, managing director (Severfield UK)

Martin Kelly, Group strategic business development director

Lee Mills, Group SHE director

Group communications manager

Three new non-executive directors

20 apprentices/trainees

We will continue to prioritise investment in our people to ensure a healthy pipeline of talent to achieve our strategic goals.

Employee engagement and well-being

We recognise that creating a happier and healthier workforce will enable us to deliver our ambition and we want to further embed this into our culture to ensure a sustainable future for our business.

We recognise that employee wellness (physical and psychological health of the individual) and employee engagement (the commitment, satisfaction, advocacy and pride of the employee) are at the heart of our business.

During the year, we conducted our first Group-wide employee engagement survey. This provided our employees with a platform to share their views on the issues that impact most on their working lives. This has enabled us to identify areas in need of improvement and create a benchmark against which we can measure progress.

To better understand the factors informing our people's views, we held a series of Staff Engagement Action Team workshops (SEATs) across the Group.

We will focus on these areas within each business unit and re-survey our employees against this benchmark in 2015/16.

In 2014/15, we reviewed our occupational health provision and moved to a new provider. During 2015/16 we will monitor the performance of our occupational health provider and highlight priority areas for promoting the benefits of health to our employees.

Leadership and management capability

During 2014/15, we invested in building our leadership teams and individual leadership capability, ensuring that our leaders understand our strategy, the associated business challenges and their roles in leading and engaging their teams. We will continue to focus on our leadership development programme with our executive directors, directors and associates.

We believe that strong leadership capability is vital at all levels within any organisation, and are committed to building the skills and capabilities of our workforce and future leaders. In 2014/15 training expenditure of c£0.3m was focused on health and safety and core technical disciplines. In 2015/16, we have budgeted for expenditure to increase to £0.5m with additional investment to enable a modular people management programme for team leaders and the implementation of an emerging leaders programme.

We will also derive additional value from our strategic partnerships with a number of universities, colleges and schools including Salford and Nottingham Trent Universities. We will explore opportunities for action learning, joint projects and secondments and at the same time publicise the benefits of a career within our industry sector.

Talent and succession

In order to protect the long term success of our business we want to ensure that we understand our talent pipeline and support their development so that our people can be the best that they can be. We would like to be an employer of choice for current and future talent within the structural steel industry and the wider business community.

In 2015/16 we will conduct a Group-wide review of emerging talent to ensure consistency and visibility of talent, succession planning and career opportunity. Our agility in deploying talent and experience to maximise opportunities through sharing knowledge across the Group is a key differentiator and one which we will continue to develop.

We are passionate about helping young people take their first step onto the construction career ladder, from school leavers experiencing the world of work for the first time, to graduates qualified in disciplines relevant to the construction sector. We believe that the recruitment and training of apprentices is fundamental to business development; another means of ensuring that we have all the desired skill bases available in the future.

We have 62 apprentices within the Group, having taken on at least ten apprentices each year since our dedicated apprenticeship programme launched in 2010. Among the opportunities available, we have provided placements for fabricators, maintenance engineers, steel erectors and business support assistants. We are also committed to providing opportunities for undergraduates via work placements and internships and graduates across a number of functions including business support, quantity surveying, design engineering, site management and project management.

Diversity

We believe that equal opportunity means hiring and retaining the best people, developing them to their full potential and using their talents and resources to the full. Diversity of people, skills and abilities is a strength which will help us to achieve our best. This is not only about treating our people with dignity and respect; it also makes sound business sense.

At 31 March 2015, the Group workforce consisted of 1,257 employees of whom 83 (7 per cent) were female. The Group's executive committee and board of directors) did not have any female representation. We do not currently monitor ethnicity.

In 2015/16, we will implement equal opportunities monitoring across the Group at all stages of the employee life cycle in accordance with local legislation. We will also continue to work with schools and colleges to increase the diversity of our future workforce by encouraging under-represented groups to study STEM subjects.

Communications

Maintaining a strong dialogue with our people can be challenging in such a geographically diverse Group, with a mix of factory, office and site-based employees. Our internal communications draw on a wide variety of media, including our workspace document sharing system, company newsletters, consultative groups, factory committees, suggestion schemes and employee roadshows. In 2014, the Group appointed a communications manager to develop more effective internal and external communication strategies.

In 2014/15, significant improvements were made to internal communications, particularly on the shop floor where new noticeboards were installed and regular project updates took place. During 2015/16, particular focus will be given to interdepartmental communication to address developmental areas highlighted by the employee engagement survey.

High performance culture

We set ourselves stretching goals and we want our people to understand the key part that they play in our strategy and our success. We want them to feel accountable for their delivery and rewarded for their success. In light of this, in 2014/15 we redefined our performance management tools and processes.

Reward

We recognise that our approach to reward is critical to our ability to both attract and retain the best people and drive a performance culture. Each of our businesses offers a competitive reward package appropriate to the labour market in which they operate and review salaries annually in line with market rates. Our focus is on cash and variable pay rather than fixed benefits and each division's reward package includes an annual Group profit performance-related bonus which encourages the achievement of our strategic objectives.

Over 65 per cent of our employees are shareholders in the Company via our share incentive plan and in March 2015 we launched a save as you earn (SAYE) share scheme to provide our employees with an improved choice in the way that they participate.

Our people are also eligible to participate in a Group defined contribution pension scheme into which we make a contribution. Employees also have the option to make their own contributions through salary sacrifice. We have also been able to facilitate a number of flexible benefits that enable our people to access programmes and savings that would not be available to them on an individual basis without additional cost to the Group. These include cycle to work and childcare voucher schemes.

Communities

Wherever we operate, we strive to leave a positive legacy. During the year, our employees have continued to support both the communities in which we operate and our core charitable programmes.

During 2014/15 the Group companies have undergone a variety of activities including visiting local schools to discuss careers, providing advice for interview techniques and contributing time and funds to support different charitable organisations.

To inspire secondary school children to consider careers in construction we participated in the UKCG's Open Doors event and over 100 children and young people attended the events at our Dalton and Lostock facilities in March 2015. Following this, close relationships with local education establishments have been further strengthened.

As in previous years, we also engaged closely with local schools and colleges for Scarborough Engineering Week.

The Group companies consistently work to spread thought leadership to employees, customers, suppliers and potential employees via various initiatives including seminars, industry specific exhibitions, site visits and events. In 2014/15 a presentation and factory tour for students from Imperial College, London was held at our Dalton site. We also sponsored the Young Designers Competition at the International Association for Bridge and Structural Engineering (IABSE) Future of Design Conference to encourage emerging new talent within the sector.

In 2014/15 Group employees have donated both time and effort to raise funds for many different charitable organisations, including the British Heart Foundation, the Yorkshire Air Ambulance, St Catherine's Hospice (Scarborough), Bolton Hospice and the Northern Ireland Chest, Heart and Stroke Baby Hearts Appeal.

We are extremely proud of the continued good work undertaken by our employees to support and engage with their local communities and charitable organisations.